Hi, we have been surprised by a relative with a gift of cash (approx. $25k). As grateful as we are for receiving the such a generous gift, we're not sure what to do with it. I presume there may be tax implications for both the relative and us? Can we just stick it in the bank or is that likely to cause problems down the line with ATO? Don't really want to bury it in the garden. Thanks for any advice you have to offer.
Gifted Money: Not Sure What to Do with It
Comments
Stick it in the bank or invest it. No need to declare it:
https://www.ato.gov.au/Individuals/Income-and-deductions/Inc…
Generally, you do not have to declare:
rewards or small gifts such as cash birthday presents (however, gifts may be taxable if they are large amounts or you receive them as part of a business-like activity or in relation to your income-earning activities as an employee or contractor).
…$25 000 is not a small gift.
Everyone else's advice is the same - it is a gift. Just because the sum seems subjectively large to you changes nothing.
Are ya gonna buy a house for "yourself" with the "gift money" - cos I heard the amnesty is over now…
if it's a genuine gift, there are no issues whatsoever with banking it
if you want to avoid any questions, simply deposit it in 3 amounts, each less than $10k - but by doing that, it may raise eyebrows..as in why are you doing that if it's a gift
simply deposit it in one go, then decide what to do with it - do you have a mortgage with an offset account?
Splitting it into 3 deposits under $10K in a short time will still be flagged by AUSTRAC, although probably unlike to be investigated.
It's an offence under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 for anyone to split a transaction into two or more parts with a dominant purpose of avoiding the reporting rules and thresholds.
Why would the OP have any issues with AUSTRAC if the money was legitimately gifted? Just let the bank report the transaction in the usual course….. Tonnes of these reports happen every day (speaking as someone who has FOI'd AUSTRAC a few times).
Buy Lego : ). Great investment.
Buy Lego. Make Lego jewellery. Sell it at the markets. Oh wait, don't. I don't need the competition.
Ooh, I just saw this on eBay …
A life-size statue of Woody from Toy Story. (Actually, larger than life. It's 7 foot tall.)
Made from LEGO! Just $22,000. You'll have some change left over from the $25K gift.
(And get $300 discount from eBay and $880 from Cash Rewards. Free pickup in Melbourne.)
I can just imagine the conversation with the tax office …
ATO: What did you do with the money?
You: I got a big woody.Leave lego on kitchen floor. Invest in joy.
Throw a party for your OzBargain mates.
There may be implications for the person who gave you the money.
I have a hazy memory of a discussion about this some years ago. I seem to remember that if a parent gives an adult child money, it can have implications for that parent's pension.
I think my mother received a smaller pension than expected (this century) because in the late 90s (last century) she gave me my "inheritance" early for a deposit on a property.
The government took the view that she was hiding assets or reducing her assessable income or something. I'd say that was a bit of a stretch, given the time frame between the gift and the start of the pension. And the gift was certainly not extravagant (though very much appreciated, thanks Mum).
Anyway, this may have nothing to do with your generous relative's situation. I just wanted to give you a heads up in case it did.
over the years we have been gifted large sums, one in excess of $100k - that one we were forced to limit each transaction to <$10k each day. this was imposed on us by our bank, not our choice.
a single transaction, IF IT's GENUINELY A GIFT, is not a problem at all - you just have to justify it as such
we got the giftee (if that's even a word) to sign a stat dec saying it's a gift, not a loan etc…etc… never a problem
Did you try to deposit over $10k in cash over the counter? I cannot understand why a bank would actively turn away money - unless the teller was particularly lazy and did not want to lodge AUSTRAC reports.
If the amount received is referable purely to the generosity of your relative AND the receipt is not referable directly or indirectly to some other consideration such as an office, employment or services rendered, the amount received will not be assessable income. If you want more information, PM me and I will send you the section of the Australian Income Tax Guide that covers gifts.
How is this even a thread. Put it in the bank. Sink it into your mortgage. Make your life better. Jesus. You dont need to tell anyone.
received a large amount of money (alot larger than what OP received) from my dad after he sold one of his house.
sticked straight into my mortgage account no one asked any questions.
and this is not the first time. so i guess nothing for you to worry about.
please dont say im bragging or anything, im just trying to help out the OP.
Casino, double it!
Always pay off your mortgage, always. You get a huge psychological boost when it is paid off.
Straight on the mortgage (or in the bank if you don't have a mortgage). No brainer really.
I had a $50,000 windfall once, and it went straight on the mortgage. Didn't spend a cent.
Yes, assuming they have a mortgage! That 25K might save you 100K* in the long run.
*Depends on several variables. Could be more or less.
Gifted 6 digits from my parents. Just put it in the bank.
You think it's such a large sum but banks deal with with crazy amount everyday. As long as you can prove to them you are not doing anything illegal, you are fine.
If it's too hard… I'll give you my address to drop it off at.
This article may help (unless the rules have changed): http://www.bhatt.id.au/blog/australian-tax-tips-are-gifts-ta…